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Worldwide Exchange

News/Business. Brian Shactman. Business news including in-depth analysis of worldwide trends.

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Us 37, China 29, U.s. 27, Davos 23, Asia 20, Uk 10, United States 10, Europe 10, Christine 9, Becky 8, Ross 8, India 7, Toyota 5, Mike Huckman 5, America 5, Canada 5, London 5, Portugal 5, Andy 4, Prudential 4,
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  CNBC    Worldwide Exchange    News/Business. Brian Shactman. Business news  
   including in-depth analysis of worldwide trends.  

    January 29, 2010
    4:00 - 6:00am EST  

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the headlines from around the globe, here in davos, jean claude trichet says we have challenges ahead with deficit. >> and here in asia, markets head for the biggest monthly drop in almost a year as techs and resources stocks weigh. and i'm mike huckman in the united states. the economy likely grew at the fastest pace in four years in the fourth quarter, but experts say don't start celebrating just yet. >> hello and welcome to today's program. i'm once again here at the annual meeting of the world economic forum in davos. maria will be joining us shortly, as well. we have a great guest list for you today. we'll be joined we the chief executive of bank of america,
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brian moynihan. we'll talk to christine lagarde, the french finance minister. we'll be joined by lord mannedelson, amongst a whole host of other guests. we'll be joined by the ceo of china mobile. but before all of that, there's plenty we need to bring you to. christine, over to you. >> hey, ross, good to see you in davos. let's do a quick view where asian markets are trading today. we have earnings in the u.s. are failing to disappoint. they hit some of the tech sector stocks here in asia. of course, we have those concerns about greece and portugal and that seems to be weighing on sentiment, as well. the hang seng off 1.1%. the shanghai market closing down below the key 3,000 level. that's going to be a cross psychological level there. the kospi down 2.4%.
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the bombay sensex one of the markets on the up side by 0.2%. and the australian market is down by more than 2%. as far as the ftse cnbc global 300 index, this is how the picture is looking. inching higher marginally, 4,341. becky, how are the european markets doing today? >> let's take a check. european markets have been trading for just over an hour. higher by about 1% at the moment. the dax higher by 1%. across switserland, markets are rising, by only by 0.3%. mike. >> thanks, becky. good morning. i'm mike huckman in the united states where it is only now three minutes past the hour at 4:00 a.m. new york time. this is how we're expecting markets to open here in the states today. we're looking at a mix of maybe an ever so slightly rally. but barring a huge rally on wall
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street today, it looks like the dow's six-month winning streak is going to come to an end in january. let's update you now on some of the big news out of the united states today that will be watched closely by markets worldwide, however. u.s. investors will get a look at fourth quarter gdp which can show the economy growing at the fastest pace in nearly four years. gdp will be out at 8:30 new york time with forecast calling for growth of 4.8% versus 272% in the third quarter. the chain-weighted price index is expected to rise 1.3%. at 8:30, we've got fourth quarter employment cost index, which is expected to increase 0.4%. meantime, ben bernanke gets to stay on the job. the senate confirmed the fed chairman for a second four-year term thursday by a 70-30 vote.
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that may seem like an overwhelming majority, but it's just 14 votes worse than the closest previous vote for a fed chief. 11 democrats and an independent joined 18 republicans in voting against bernanke. president obama hailed the action praising bernanke's, quote, wisdom and steady leadership. let's get back now to davos. we're rejoining ross and maria bartiromo, maybe, as well. >> yeah. maria will be joining us fairly shortly, mike. it's great to have you on the show today. thanks for joining us. look, you were talking about that 5% gdp number for the fourth quarter. in china, that would be seen as a disaster. we'll jump for joy if we could more than that. in china, that would be seen as a disaster. joining us now is a man with more insight going into the domestic economy. wang shanzu is the world's
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biggest mobile phone operator. of course, you're working in a big market. you've had incredible increase in mobile phone penetration in china. is there any sign of that slowing down? >> i think compared with previous years we will have a slowdown. because in the bigger cities like beijing, shanghai, the penetration of mobile phones is as high as 100%. so most growth is from the rural areas. a slowdown is possible. but we will have growth for the data and information applications. >> and that is a growing part for all mobile phone companies, as well. i also want to get your view on chinese growth. we were talking to zhu ming. we will keep policy fairly
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accommodating. what's your view of the sustainability of overall china markets and china growth story? >> i think in last year, the growth of what is not only from the capital investment, but also from the consumption. and telecommunications, especially mobile phones are one of the consumer products and we got policies from the government. for example, if they can get about 13% from the government, this year, the government will continue. >> we're talking about government stimulus policies around the globe. if the government withdrew that support, how big of an impact would that have? >> telecommunications, the
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stimulating policy is helpful about the cost of the very largest demand in rural areas. we think we'll still have further growth. but we hope the government will continue the policy for stimulation. >> mr. whang, this is christine all the way here in asia. i see google ran into problems with censorship regulators in china. what's your stand on censorship when it comes to mobile phone text messages? >> i'm a businessman, so i like to talk about this in the position of businessman. i think every company, if they want to have business in a foreign country, they should abide by regulation locally. and for the internet operator, it is more important.
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so i don't think there will be a big impact for some internet company because we have many choices. our customers have many choices. for example, we can you'll that and also they can use yahoo! they can use microsoft bing. so i think if google really pulls out of china, they will lose more. >> has google's problems in china changed the way you would launch or sell the google android hand set? >> no. i just met with someone, you know, and enjoy the operating system for mobile phone and china mobile is one of the members of alliance enjoyed.
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google will continue to support china mobile to enjoy and use the system. thanks very much indeed for joining us. we appreciate your time. becky, we'll give it back to you. >> let's bring you back to what's going on here in london. andy is joining us to bring some of his intelligent and insight -- >> wisdom. >> wisdom, that's what i was looking for. andy, let's talk about the equity market performance so far this year. today it looks like european markets have managed to gain some ground. yesterday's lows for 2010, it's been a pretty tough time so far for equity markets. what are we looking at? >> january is about 5% down, isn't it, on the ftse 100. and really, it's down to the
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sort of heavyweight sectors, mining in particular. people are concerned now that china is slowing down and as a result, the miners, which form a large chunk of the uk market have been hit. then our banks are allowed to pay anyone, sort of discussions and banking profits have been hit, as well. so the big sector etd in the ftse have had a pretty tough time. small companies are up for january and so it's more a case of people had a good run last year, particularly in december, and it's like any party. it takes the world's look at a hangover. people will be looking at the sort of results coming through and seeing whether companies have replaced cost cutting, which has driven profits by revenue growth. >> okay. andy, thanks very much for that. let's send it back out to da vote and pick up with our next guest in davos.
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>> becky, maria has joined us. we are going to be talking to a number of guests over the next two hours and one of them right in the sweet spot of financial services. we want to get the landscape on the regulatory environments. we're going to talk to brian moynihan of bank of america, coming up. >> let's do it now. >> let's do it now. >> the new ceo of bank of america is with us. brian, good to have you on the program. >> thank you so much for being here. >> one of the topics of this forum as much as throughout business kwloeblly is this idea that the president came out with president obama two weeks ago to split capital markets and businesses for bureau lending from the banks. how do you feel about that? what's your view on what's to come in terms of financial regulation? >> well, i think our view of financial regulation is our industry. in the spirit of all the people here, we have to be part of the solution and we have to get more involved in dialogue.
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as to the proposals on a proprietary trading, which are the president's proposals, i think as it does get defined, we think at our institution, we do things for our customers and that's what i think everybody recognizes. the customers need us to mediate in the capital markets, whether they're large companies or small companies. >> so why do you think that there's such, you know, a bright over, you know, getting to the position that we were in last year when lehman brothers went bankrupt and we had that moment in time when the commercial paper market came to a halt. what could be done to ensure that the lending part of the business is safe with depositor's money and banks and financial institutions can still take risks, raise their balance sheets and not bring the entire economy to their knees? >> one, you have to have good risk management and it failed a lot of institutions. secondly, i think we can -- slew
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the regulations that exist today and enhance those regulations,x make sure that the depositor's money in the funding of the securities firms are separated and they are in our firms and they are in other firms. we can do that so we don't have the implicit crossover and our industries guarantee a deposit money. but i think the idea of not having our $250 billion for our clients across the board is an idea that wouldn't have solved the last problem and won't solve the next. so i think the idea of keeping separation within the institution is fine. but you need all those capabilities. and i just want on a panel with a bunch of our clients that said we need banks to do these same things. our industry will engage. i hope others engage with us and we can get to a place where it makes sense for our customers. >> you're going to be traveling to var why you clients and others throughout the rest of
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the world. you're new to this job. tell me what the market feels like right now. do you think that the banking skter is well capitalized at this point? and what are you feeling for investors? you've got the market up 60%, 70% from the lows. what's the mentality out there? >> well, i think the banking sector has capitalized itself. turned new rules, we'll have to play into that. bank of america raised a lot of capital. the banking industry is healing. the critical thing, though, is that we talk to companies that employ lots of people. they're still somewhat questioning the need to invest in the demand side and i think the responsibility to us as a participant and economy and across the world all our colleagues is to help keeping moving the economy forward. we're trying to make all the good loans we can and try to provide the capital to these companies. the mood is better than it was three months ago, but it's still pretty sober because unemployment levels are high. we're seeing those things
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happening, they're more positive and we continue to be optimistic. the real critical issue now is we have to make sure that we keep going up and don't do things to push it down. >> let's hear from mike in the studio. >> thanks, maria. good morning, mr. moynahan. there's been a lot of talk in the states here this week about the government needing, wanting to make big banks smaller. is b of a too big and is that or should that be the government's role? >> bank of america is not too big. we think what we can do is provide incredible things for our customers and our clients, whether they're a consumer or whether they're a corporate client. and i think the government is -- the role the government is trying to play is to make sure that the institutions remain stable through all kinds of prices. and i think that's the absolutely appropriate role for the government to play. big by definition knot the question. it's a question of how you manage your activities and how
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you manage risk. >> hi. it's andy from schroeder's here. do you think those markets are now functioning as they were or, you know, do you think there's a place, really, for all these isoteric instruments going forward in the banking industry or should we just get back to making life a lot simpler? >> i don't think it will be that binary, in other words, having or not having. i think the idea is everything in moderation. so i think those activities are tremendously important for helping manage risk, buying credit protection for certainly clients is an important part of what we do so we can use use our capital. i don't think there's any biary answer here in terms of having one thing or having cds or not having. the idea is to use them in moderation and use them effectively. and frankly not so store risk kwhb is part of the problem.
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if you look at the damage done in other institutions, when they start storing risks it's esoteric. >> great to have you on the program today. >> thank you. >> we're going to continue talking on u.s. closing bell, so we look forward to the rest of our interview later today on u.s. closing bell. thanks, brian. >> and don't forget, of course, you can watch all the interviews that we've had so far on cnbc from davos and everywhere else. where else? of course on the website, krn.com. if you've got questions, as well, that you want to get to the guests, and we have a great lineup again today, e-mail us, davos@cnbc.com. we'll try and put some of your questions to the guests that we've got coming up. a little later, we'll be joined by christine lagarde. becky will be joining us and she'll talk to barney frank, as well.
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and, of course, lord mannedelson, first secretary of state in the uk. plenty of good guests coming up. we're also joined now by another guest, a member of our climate council and the countdown to copenhagen 15, which was such a great disappointment. we have now joined by lars vattenfhor. we heard earlier this week, of course, from the president talking about infrastructure, as well as there's big pressures on energy infrastructure at the moment, as well well. how are we, in the failure of copenhagen and the squeezing budgets, it's all about the budget being squeezed this week in europe in particular. how is that going to impact investment in europe in energy infrastructure? >> well, it's all about investment, you can say. and that i mean energy security. i mean climate change. i mean jobs, i mean growth.
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clearly, what has happened in copen hague.en or what did not happen in copenhagen means higher uncertainty, less investments and a delay. >> but all this pressure, as well, is on government budgets. you can't open a paper. and we talked to jean claude trichet yesterday, the greek prime minister, alistair darling in the uk, you can't open a paper without the discussion of governments having to get down their budget deficit. how is that going impact? >> i think it's going to impact our industry relatively little. why? >> and that's because we, of course, have a task and that is to provide our customers with energy. this good is very value and if you see the value proposition that we have, it's a very, very good one. that is we can fund that investment through the capital markets.
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>> you just announced this week you're going to build one of the world's biggest wind farms off the coast of britain. how much more are you going to move into renewables? >> now, we're expounding fantastically into the renewable area. and especially the offshore wind. today, we have an offshort wind in europe of about 25% to 30%. and we will keep that for the foreseeable future. so we are really, really moving in big time into wind and the uk is, of course, is the forefront of that. >> good to talk to you, lars lars. thank you very much for joining us. we appreciate all the work you've done and is will continue to do we hope for that. when we come back, we'll be joined by the canadian finance minister. plenty to talk about with him. and we'll get his view of what it means if we get that good growth number later today out of the u.s. oh, don't forget, i did mention
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it, but we'll be joined by barney frank, as well, and becky will be joining us for that interview. more to come from here in davos.
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one of the big focuses is going to be the gdp number we get out of the u.s. what's the sustainability after that? >> let's get a view now from the man who runs prudential. we're joined by the ceo of ntm. thanks very much for joining us. we're going to focus on this u.s. number. what will bring into question is what happens after that and the sustainability of the recovery? what do you think of that particularly for the oecd countries? >> there is a growth of uncertainty. certainly win things have gotten better, so in a way things are under way. but the global imbalances and the imbalances in the u.s. economy are still a source of concern. and it's not clear how quickly they can be resolved and how things are going to weigh on consumption. so i'm still relatively cautious. >> and will that, do you think, weigh from here on in on the
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international capital markets? we had a great rally in stocks, you know, last year. but i wonder now whether you believe that that is going to be more uncertain, as well. >> i think a lot is going to depend on what happens in the emerging markets. prudential is very much active in asia. that is really our primary area of growth. it served us very well. and the economic growth remains very strong in the region. here in davos, we're meeting officials from a number of key asian countries for us. and the outlook for 2010 is positive. and i am hopeful that if things continue like that, we may have a better outturn in 2010 than we expected. >> andy is in the london studios from schroeders. he has a question for you. could you say what you're thinking now with the uk? every time i read something about prudential, it's all asia. what's your thinking about the uk market? is it just very mature and is it a cash cow or do you actually see growth tints? >> it's effectively very
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important for prudential, but so is the uk. since they took over, they have been very explicit, that the uk is a core strategy of the group and just allow me to remind you that we have 7 million customers in the uk. so we will not abandon there. and it's a largest story business. we've been operating in the uk for 160 years. after 160 years, we should be able to generate positive cash flows which can be reinvested in fast growing profitable markets. >> i understand half of your profits come from here in my part of the world. i understand you're cutting back on growth in some of the developed markets to focus more on asia. what are some of the opportunities you see here in
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the region? >> i think theory normus. if you look at what drives our business and our, it's savings rates, demography. risk factors in asia are very, very favorable. the investable savings are forever increasing. to give you an indication, we have doubled three times in asia. so we're now eight times than it used to be ten years ago. and i believe going forward the growth rates are sustainable. as you know very well, christine, in asia, asia is diverse. we're operating in a wide range of economies for korea, taiwan and japan. moving on to the two giants, india and china, the city states of hong kong and singapore, which are very important markets for us, and what i would
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describe as a sweet spot of a region for us, the southeastern markets of understand near ya, malaysia, vietnam, we're doing extremely well. >> thung very much indeed for joining us. we're going to take a short break. just a remind he, in the uk, there's an ongoing hearing and tony blair will be giving testimony. ddddddddddd
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let's take a check around the markets and find out what's going, starting with the ftse cnbc 300 now where we are just a frankz fraction lower, but well off the lows of the session down by about four or five points,
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just about 0.1%. christine. >> hey, becky. here in asia kra, it's a negative session. greece and portugal are also weighing on sentiment. the nikkei 225 is down more than 2%. the hang seng is down 1.2%. the shanghai market closing below the key 3,000 level. elsewhere, we're seeing heavy falls in south korea. that market down more than 2%, as well. the bombay sensex, trading to the upside on a friday, up 0.1%. and the aussie market is down 2.2%. so a lackluster session here in asia. mike, over to you. >> thanks, christine. good morning. i'm mike huckman in the united states where it looks like we could have a lackluster at least open here in the u.s. in five hours' time. it looks mixed right now,
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anywhere from a higher to a flat, maybe lower open for the s&p 500. but really, all betts are off until four hours time for now when we get the fourth quarter gdp number and certainly that has the potential to move the markets here in the united states. becky, back over to you. >> thanks, mike. let's talk about what's going on in london. tone know blair faces a public grilling today on his decision to wage war against iraq over seven years ago. blair is a witness in an inquiry as to whether the u.s.-led war was legal. joining us now, anna edwards who is in westminster. >> thank you very much, becky. i'm standing just a stone's throw away from westminster. tony blair is in the building behind me and is about to start his system in front of this
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team. he's going to be quizzed for some six hours we expect today. i'm rounded by an enormous security presence, plenty of national media and many demonstrators, anti-war protesters from all walks of life getting increasingly vocal in the background. tony wlar was the prime minister of this country when the uk went to war back in 2003. this inquiry is quite broad, but the public and inquisitors will want to ask specific questions of him, including did he mislead parliament and the public about the reasons he was going to war. he talked a lot about the weapons of mass destruction that saddam hussein was supposed to have before 2003 and was vocal on that subject. but has since indicated in an interview that he would have gone to war, anyway, had there not been weapons of mass destruction.
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we've heard from a number of senior advisers that they believe the war was illegal. the attorney general actually changed his mind on whether it was illegal just before march of 2003. so perhaps we'll hear more details on why that was and why he changed his mind. >> anna, thanks for that. let's get out to davos now and join marie bartiromo and ross westgate. >> thank you, guys. just me for the moment. maria will be coming back. of course, our world is focused in on that u.s. gdp number that's going to come out later today. and it's even more important for some than others. let's speak now to jim vlassey, the minister of finance for canada. it's going to be a good number relatively speak to go what we've seen out of the u.s. but there are concerns about sustainability and a lot of experts are saying we have to
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look through this, this bounceback figure. what is your view? >> i think the latter figure is correct, that this number probably will be fairly good compared to recent quarters. but that next year, 2010's numbers will bear some examination. there is some hiring that went on toward the end of last year that is responding to stimulus and government programming that may not repeat itself. >> what are the implications then for those like you who are in charge of policy? >> well, we are counting on modest growth this year. we're not planning on large growth. we anticipate modest growth in the united states, as well. the imf has our economy in canada growing a little faster than that of the united states. modest growth and we have to be sure that we stimulate our economies through all the g-20 countries to ensure that we don't fall back into a downturn. >> sir, good morning. this is mike huckman in the united states.
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and i've got two questions for you. number one, what do you think of the 70/30 vote late yesterday to reconfirm ben bernanke at the fed? and number two, what do you make of the grilling that your u.s. colleague treasury secretary tim geithner took on capitol hill this week? >> well, i'm obviously not going to comment on senate votes. we have a good working relationship with ben bernanke. i've worked with many treasury secretaries in the g-7, g-20 and i understand there's a lot of popular discontent with the bank situations not on the north side in the united states, but in the united kingdom and europe. we're getting together again this weekend. i look forward to the central bank gfrs, including mr. bernanke and secretary geithner
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being there this weekend. >> doesn't it help that mr. bernanke has been re-elected in terms of the continuity snm you've been having intense discussions in the last year to make that ongoing job easier that he's been there and you know what you're getting, you know the perpendicular. >> it's always easier to work with someone who is familiar with the subject and who is familiar with it. a group of us have been in this crisis together, especially the past two years, and there is continuity there. and i think it's valuable in getting to the implementation and standards that have been developed by the basil committee. we need to not only talk about it, have the standards in place but implement them and that's a big job for 2010. >> mr. flaherty, this is christine in asia why. how much of china's vast natural resources is tied to the china bank story and are you concerned about the lending there? >> we understand the steps that
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have been taken in china. they have concerned with respect to their little bit of overheating that they perceive in their own economy. we're looking forward to long-term growth in terms of canadian exports of goods and services. to china in tech, had a very good meetings in china in august. they've permitted the expansion of some export work by our institutions in china, a tremendous market for us. but we are looking at the longer term. this isn't just a one or two-year proposition. this is a longer term proposition for the bilateral trade relationship between china and canada. >> thank you so much for joining us. we appreciate your time. now, don't forget, if you want to watch all the interviews we've had here on cnbc, and there's been quite a few of them, just log on to the website. there's a special page that you can do that on. i believe it's www.davos.cnbc.com if i'm right.
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there you go. that is the page that you can see at the moment. you can watch all the interviews. there's special blogs, special reads, as well, and unique material that you cannot find anywhere else. so have a good look at that. knew, of course, we heard the minister saying one of the big challenges is to make sure that markets are reacting efficiently. how are we doing? joining me now is jamie corona who is general manager for the bank of international sentiment. one of the key factors that we've been through is a collapse in cross border lending by banks. every bank across the world pulled in their horn from overseas. has that now stopped? is lending still falling or have we stabilized? >> i think we are stabilizing rapidly and the figures show that still, there is a little bit of contraction, but in a
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much more decelerated way. and it is become to go be more differentiated. so we are going in the right direction. >> it is a little bit more differentiated. where are we seeing normalcy and where are we still seeing pressure? >> no. i think it is -- it would be necessary to analyze what countries will have to see the figures. and also by different kind of investments. so i think the interbank lending was one of the areas where the contraction was higher and eveng this area now is improving significantly. >> this is christine in asia. when you look at how the countries try to control bank lending, one of the risks of projects defaulting as a result, turning into bad loans, what are some of your concerns there? >> i would say two things. one, every time that the credit is growing rapidly, supervisors
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have to pay attention. that is one of the lessons we have learned in many crisis, not just this crisis. theñi good thing is that the supervisors in china are really paying attention to this increase in growth and the potential implications in nonperforming loans. we have seen that they have been taking measures, reducing loan to value, so i think this is a very well known factor to the supervisors in china. >> what else would you like to see china do to control that risk? >> i think it is -- the supervisory elements and actions that can be taken are different. a good dialogue with the banks trying to moderate the credit growth and most importantly, trying to make sure that the lending standards are appropriate for the situation. i think these are the key elements. >> yeah.
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let's talk about confidence in the west banking system. central banks at the moment are concerning pulling back and withdrawing the special liquidity measures they've done to support the system. are you confident enough that banks have enough confidence with each other to revive the capital markets, to revive the interbank lending market without that support? >> i think this is something that the banks themselves have to work also. they have to become less depend from these facilities. they have to try themselves to lengthen the liability structure, lessen the liability structure, get more long-term liabilities. little by little. at some point in time, we will have to happen. central banks know how sensitive this is. but at the same time, i think
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there is a little work on the part of the bank to prepare for that and have a liability structure that is better prepared for these kind of things that will have to occur. >> jamie, thank you very much indeed for joining us. mike. >> thanks, ross. still to come on "worldwide exchange," u.s. gross domestic product growth is expected to have accelerated in the fourth quarter, but is the recovery really going strong or is the increase mainly due to a less aggressive cutback or slower liquidation in inventories? plus, we're going to have a lot more from davos, right, ross? >> absolutely. and there's been fierce debate here in da voet voes about how the euro zone deals with the debt problems of some of the smaller countries. we'll get the views from christine lagarde.
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with afghanistan. but from that morning, iran, libya, north korea, iraq, the machineries, you know, of the former pakistani nuclear scientist and who had been engaged in illicit activities and distributing for this material, all of this had to be brought to an end. so that was your perception of the way in general the risks, the global risks had changed, that one had to think about them differently? but saddam himself was not a sponsor of al qaeda. he hadn't been involved in 9/11 in any shape or form.
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the saddam hussein at this point become more of a threat than he was before 9/11? >> well, i think he puts it accurately in his letter to me. whatever objectively he had done war, it is our perception of the risk had shifted and the reason for dealing with iraq, and i think i said this at the time, was because it was iraq that was in breach of the united nations resolutions, had ten years of defiance, and i felt that we felt it was important that we make it absolutely clear, he is to come back into compliance. >> we'll come back to the details of this. i just want to follow the evolution of -- >> that's tony blair, former prime minister, getting questioned over the iraq war. let's do a quick check off how asian markets are doing. ayesha faridi joins us live from mumbai. india is one of the few markets trading to the upside today. what's going on? >> yes, it is, christine. but you have to factor in the kind of shock equities have seen
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in two days. almost a 200 point swing is what you've seen for the nifty after shaving off 100 odd points yesterday, 100 points today. finally we've broken into the green. we have seep a fair amount of selling already ahead of the rbi credit policy. here is what the reserve bank of india has done. they have indeed hiked the crr, cash reserve ratio, in two areas. not just that, the numbers have been left unchange. the reason the document has been so hawkish in nature in terms of excess liquidity was leading into inflationary pressures, as well. so that has been the reason. they're begging it to actually be a hike by 50 basis odd points so that quarter bid is ahead of what the market was expecting. interestingly, you are seeing the entire interest rates in the sensitive sectors leading to
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this turn around to the banks which are seeing a fair bit of recovery. you are see the entire real estate basket which is holding up in a couple of these autos which stand to be. they are seeing a good bit of recovery. like i said, we're seen a fair amount of selling to we've had our share of that. >> speaking of research bank of india, what does the central bank do on gdp growth? >> the gdp tarlth has been upped and upped significantly now. there have been statements coming in from the reserve bank of india in terms of demand, some bit of signs of of economic improvement, as well. >> ayesha wab thank you very much for that. and for the rest of the other asian markets, let's go to adam. negative session. >> yeah. you know, christine, it wasn't a great way to end the week.
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all the asian markets get into a negative close this friday. of course, there was a lot of caution within these equity markets because we are waiting for the gdp numbers to come out of the u.s. and it's a friday. we are getting big data out of the u.s. markets. we'll get some reaction to that on monday morning. but today was the last trading day for the month of january, first month of the trading month for a fresh trading year. of course, all the markets in north asia didn't stack up too well. take a look at the year-to-date scores across asian markets. the worst performer which was the nikkei 225 was one of the best performers if not the best. in terms of japan, we saw the u.s. dollar strengthening, but the yen was relatively strong and the asian trading session versus the u.s. dollar and the euro and that really did hit the exporter stock. of course, toyota continues to be in the limelight.
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remember, i was talking about this company yesterday. now its recalls expanded. it includes europe and china, as well. and so the reputation of damage is hitting the stock bear. next week is the big week for corporate earnings. we have numbers from honda and toyota. overall, the asian markets were very weak. now back out to da vote with ross. good morning, ross. >> adam, thanks very much. one of the great things about doing the world economic forum is you get to spend time with your cousins from the colonies. from the colony webs i like that. >> can i say that? >> no, you can. that's perfect. >> becky, great to have ow "worldwide exchange." we have a special interview coming up. >> we do. we're going to be talking in just a few moments with barney frank and he is the house financial services committee chairman in the united states. he always speaks his mind, so look out if you're telling him something he doesn't want to hear. we're going to talk to him and get his first comments on the bernanke confirmation.
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that's something he says could have really rattled the markets if it didn't go through. it's coming up and we'll be talking to him about what he sees in the housing market, some of the big taxes going forward with the banks, what it means for his own legislation or where we're going to be at the end of the day. >> and he was the man with the volcker plan that says, hey, don't overact. it will take three years for this to get enacted. >> it's been wonderful here being with you. we did not get to spend nearly enough time together after hours. we'll fix that up. >> you'll be flying back a little later. i'll be very sad about that. okay. so barney frank is coming up in a few moments time. here is a roundup of some of the thoughts. >> we need the industry and we are very much in favor. the only thing is, we have also to analyze the global impact of some of these measures.
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i think the talk about trade is incident luktally for demand asking for more cap. >> we all agree that capital requirements should be managed in different ways, in different terms of the cycle. clearly, we can put all the b k banking investment. i think the pure commercial banking is not a sustainability business in terms of profitability. >> it has all the ingredients of a good screenplay. in the end, i think it's more of a drama than it is a tragedy. but i think probably what's happening is dialogue channels are opening up. and what we really need here is people to talk to each other.
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the headlines from around the globe here in davos, jean-claude trichet says we have a big deficit on both sides of the atlantic. >> in the united states, the economy likely grew at the fastest pace in four years in the fourth quarter. but experts say don't start celebrating just yet. >> and here in asia, markets head for their biggest monthly drop in almost a year as techs and resources stocks weigh.
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>> good morning and good to have you with us here on "worldwide exchange" on cnbc. i'm mike huckman. it is 5:00 a.m. new york time on wall street. welcome to the start of your global trading day. let's get a look now at how the u.s. markets are likely to open or, as ross called them a few moments ago here in the colonies. we're looking at a mixed open as far as the three major indices are concerned. but take a look at the futures of the nasdaq. it appears, at least at this early hour, and we're talking, granted, 4 1/2 hours time before the opening bell, that the blockbuster results out of tech giants microsoft as well as amazon.com could lift the nasdaq, which was yesterday's biggest loser, at least to finish out the month of trading in january on a positive note. although, for this month, all three major indices will be
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down. the dow is off 3% in the month of january. the nasdaq is down 4% this month and the s&p off 2.7% for all of those inest investors who subscribe to the belief that as goes january, so goes the rest of the year. becky, over to you. >> let's check on what's going on here in europe. it's just after 10:00 a.m. here in the uk, 9:00 a.m. across the rest of the continent. and the markets after a couple hours of trade look like this, higher, but simply diminishing in terms of the gains. about 0.5% higher for the ftse, dax and cac. the smi has turned a little negative now, down by 0.2%. let me tell you what's going on with some of the data we've got coming out from the european union. december unemployment, 9.6% versus 9.5% in november. that is revised. the german -- no, actually, let's bring you some of the other data from the euro zone first.
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we've got cpi figures coming out. let me tell you what's going on there. euro zone january cpi forecasting increase of 1.3%. the cpi, ur roy row zone january cpi estimate of 1.3%, let's check on that. i want to get a comment from the macro situation of the euro zone. andy, from schroeder's, where do you think the euro zone stand on the macro position? we've obviously been paying a gate deal of attention to individual economies, like greece, spain and portugal. >> i think the euro zone is struggling along with everybody else. unemployment is a big problem from the euro zone to the u.s. to the uk and it's going to be hard for any sort of meaningful recovery in government finances without getting people back to work. because employment creates wages which creates taxes which help
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reduce the deficit. if unemployment keeps going up, then you're not gotting any money in from taxes. you're paying money out on social protect. that's the big question, can you, with all this stimulus, surely at some point we would see unemployment falling. until that happens, you can't see any sort of meaningful recovery. but put that together with the cpi number, which is ahead of inflation and forecasts. you have a position there where the government is going to keep increasing benefits, etcetera, and people's real incomes are going to get squeezed. so you've got quite an ugly outcome for quite a few economies. in euro land, you don't have the labor flexibility which you have in the uk and the u.s. >> let me just clarify those figures. the december unemployment figure according to euro stats, 10%.
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this is the euro zone, 10% unemployment and the november figure revised to 9.the%. >> let's get back out to becky quick who is standing by in davos with our next guest. becky. >> becky, thank you very much. we appreciate it. right now, we are joined by special guest barney frank, chairman of the house finance services committee. mr. frank, thank you very much for joining us. we appreciate it. we have been watching a lot of things that happen out of washington this week and yesterday, ben bernanke was confirmed for a second term as the federal reserve chairman. i know you had expressed some concern about what would happen to the markets if he wasn't. is this a relief? >> it is. you know, it's an odd world in which many of the republicans were denouncing this man who was the single most influential adviser to george busch. busch was the chairman of the economic advisers under bush. and, you know, he worked very
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closely to secretary paulson. there was an interesting disease outbreak on january 1st. my republican colleagues fell prey to mass amnesia and fell prey to what happened before. ben bernanke is not at culpable as alan greenspan. but once the reseg hit, i think he did a great job. unfortunately for many of us in politics, you don't win elections by saying, things would have been much worse without me. but for bernanke to have been defeated now, there would have been a long hiatus if you found somebody else. and to have been defeated by some irresponsibility would have been a mistake. i think what happens was this. i think the republican party is midst of a struggle and the more conservative elements are taking over. they've become the arch critics of the federal reserve. i think some of the important
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economic runs, ridges em betted in the economy went and said, have your fun, but don't cause a major crash. you have to get this guy confirmed. >> but it was not just republicans who voted no. there were some democrats who voted no. >> there were some democrats who were off, but it was primarily -- this became a potential problem when the republican leadership said they were going to be against it. and i think senator mcconnell, i think he was told by many leading republicans in the economic part of the country, this isn't a good idea. >> like a judd greg or some of the people -- >> well, judd gregg has always been on the responsible side on that side. but i mean people in industry, people in major important positions in the private sector
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economy. >> he was reconfirmed, but he had 0 votes against him and that's the most votes you've ever seen since the senate has been voting against these nominations. >> the fact is that once you're in, you're in. there are problems that he faces, but in some ways, you might say he's strengthened because i don't think he plans to ever go through this again. he's in his last term in effect as the chairman. no, you know, think back, do you remember how many votes were cast for or against any tomny for confirmation? >> not off the top of my head. >> if someone wanted to correlate the number of votes cast against people with confirmation with the extent to which they were able to go forward, i don't think you'd find any correlation. >> many business leaders over the last few days have raised concerns about the regulatory proposals coming out of washington, particularly aimed at the financial community.
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one of them is the bank tax. another is the limits on proprietary trading. the bank tax itself would be proposing about $100 billion that it would be taking out of the community. your fees and funds that you've proposed would probably take another $150 to $200 billion out. when you start adding all those numbers up, does it concern you -- >> yeah, you know what you get? about two weeks' worth of bonuses. it's extraordinary. when they pay each other their enormous bonuses, that has no ability on their ability to lend. we have put a fund in the fund. i want people to understand. the fund, we hope never to be used. the fund is there. we are going to put legislation in place. the fund says if one of them does fail, the institution dies. we have enacting death penalties
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in the congress this career, but not for old women. but for badly run institutions. we've changed that rule which led them in aig that said we have to pay everybody. that is no longer to be the case. the administration does not want it to be a fund in advance. neither does the senate. the financial industry should be the ones that they'll be the ones that have to play as needed. but if our plan works as he think it will work, it may not be needed. he can see the argument for waiting. >> do you think the bank tax will go through? >> absolutely. the notion that people, including the fed, that xhan about the deficit and then object to a very small tax is mind boggling. by the way, the requirement that this tax be leveed, we put into
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the original t.a.r.p. about it bill and said, you have to pay it back. by the way, it's not just the t.a.r.p. but you had fdic guarantees. you had other acronyms, the talk. at one point when somebody said to me, we're worried about turf and i thought it was a new acronym. the banks have so much help, ta that for them to complain when we're trying to reduce the deficit is outrageous. >> mr. chairman, i wish we had more time to talk with you, but i really appreciate your time today. >> thank you. >> guys, we'll send it back over to you. thank you very much. >> thanks, becky. so there will be death panels, after all, in washington just for bad institutions. still to come on "worldwide exchange," we will have a lot more from davos, including the french finance minister, the british business secretary and the viewpoint of the european
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commission. and that's just the political lay la. so stay with us to see which business leaders will be bringing you. back in a moment. but in business, only two matter: red and black. red, well, no one wants that. black on the other hand, has strength. black is always in style. it's what business looks best in. black is where growth and success happen, and it's easier to get there and stay there in ontario, canada, especially with our competitive tax rate. ♪ ontario, canada - the world works here.
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on cnbc.com now, joseph stiglitz tells us in da vote that bankers are still receiving
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incentives to take risks. and deutsche bank's ceo said president obama's plans putting tougher regulations on the banking industry needs to be coordinated on a global level to avoid financial instability. and billionaire investor george sore ross told us china will remain a very good yeah for investme investment. china will come out as a real winner according to sore rosos. read more at cnbc.com. >> welcome back to "worldwide exchange." let's do a quick check off how gold is trading right now. down $2.20. $1,083.30 an ounce.
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as for nymex sweet crude, the data is front and center as far as data is concerned and the dollar is up 27 cents just a touch, $73.91 a barrel. and trend is trading to the upside, as well. $72.40 a barrel. on that note, back to ross and maria in davos. >> hey, christine. we will get christine to come over, as well. that would be fun. i would love it. >> i'll tell you what goes on here. you get a lot of information from the interviews that we do. but if you really want to measure the mood of what's goes on in davos, it really isn't in the private discussions and in the parties afterwards. how do you assess how participants feel this year? >> a couple of things. there is more optimism. i think we'll both been hearing that. number two, a lot of talk about these proposals coming out of the administration. number three, something i heard last night, people feel that we
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are going to have some tough relations in 2010 between the u.s. and china. a lot of worries about agreements when it comes to the environment, agreements when it comes to incident luktal property and agreements when it comes to trade. there seems to be some friction there. we'll see where it goes, but we want to make sure with that relationship and china, cooler heads prevail. >> this will be one of the big themes over the next sort of decade. well, this century, as well. and it will be interesting to see how everybody else plays into that. what is europe's role going to be in that power shift? >> absolutely. and this is all happening, obviously, with the back drop of an economic recovery supported by government stimulus. and that is what we're focusing on. what happens when the stim loose is over? and what happens when those start to unwind? >> and you were speaking to
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jean-claude trichet and he was talking about undoubtedly we face a challenge of deficits on both sides of the atlantic, right? >> that's right. and that is the main issue. also, when you look at europe, look at what you're dealing with in greece, in iceland. greece is saying, we're going to get the deficit down to 3% of gdp. in three years, it's at 3%. we'll see if that effects the euro zone. >> big euro zone discussions, a heated euro zone debate. we've now got a guest who will give you her own particular insight. >> we do. we are honored to welcome back to the program christine lagarde. it is great to see you again. >> good morning. >> thank you so much. we're talking about economic affairs, if you will. can you characterize where you are in the euro zone in france in terms of the economic recovery? >> we are at this very, very interesting point, which is a fine line where we have to continue the stimulus packages
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in 2009. and we have quite a bit to unload in the economy in order to continue stimulating it. and yesterday at the same time, we need on identify the areas where we can restrict spending, public spending, and start reducing the public deficits that we have expensed in 2009. and some of us, a little prior to that, as well. some of us have been running a deficit for years and we need to attack that early on. it's a fine line between continue to spend because we want to stimulate that growth that we have and at the same time, indicate and make sure that we are all committed to reducing public deficits. >> how worried are you about what's going on elsewhere, away from france? what about greece? are you worried that that could have ripple effects throughout the euro zone? >> the euro zone & euro zone. so it's one single monetary
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area. any single number state, france, germany, greece, is not alone. and it's an interesting process because we're not at the same stages of development. we do not have the same business model, necessarily, and yet we have to conduct similar policies and have similar commitments. and being accountable to each other means that when greece, for instance, proposes a list of measures that it's going to adopt in order to reduce its budget deficit, in order to restore its public finances, then of course, we'll look at it very carefully and the commission scrutinizes all those proposals that greece has made and we will be saying to greece, this is fine. there you should go a little further. here you need to accelerate or this whole package is okay. we will be doing that in the course of next we're.
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but having said that, don't forget, the euro zone is the euro zone. it's a monetary zone which holds us together. there is no way out. there is no bailout system and we have to deliver on the commitments that we made and frankly, that's the point. >> you talked about the different speeds of the economy and how we all need different policies. that was inherently built in when we created through zone. do we need to change some of the rules, some of the mechanic nemps that there's this idea of a bond being floated? do we need to change certain aspects of the agreement and have greater integration? >> well, the economy has changed in many ways. if you look at the growth of stability package which provided for, you know, no deficit above the 3% line, look at the euro zone at the moment. almost nine states are in excessive deficit procedure.
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why was that? because we had to spend money in 2009 and clear, we broke the rule. we broke the limit and now we have to get back gradually to where we should be. same commitment in relation to inflation. same commitment in relation to deficits. and we need to have a timeline by which we, you know, respect those commitments. >> stephane is in our paris office and he would like to ask you a question. >> mrs. lagarde, mr. sarkozy last year says do you think france has the power to change things in terms of currency markets? >> well, a single man sometimes has the power to change things. and a single country with some proposals well articulated
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taking into account the interest of all can certainly propose changes and convince. some can be a matter of dictating, you know? it's going the be a matter of working together and making sure that those imbalances that have laid the ground for some of the most difficult crisis that we've been through, they need to be addressed and they need to be addressed collectively. >> minister lagarde, let me ask you about employment. you've been talking a lot about jobs. what can you do? what can the country do? what's on the agenda in terms of turning this unemployment situation around? and characterize where you are on that because i know you have new data. >> yeah. moment of joy. the december numbers were positive, actually, for the first time in many, many, many months. the economy has not destroyed jobs. and we had less applications for the unemployment, which is good,
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which is probably a signal in terms of what we've done in terms of support to the economy in general, particularly the policy on unemployment and unemployment and delivering results. am i confident that in the future it's going to be exactly the same and we'll have the same directional trend? not necessarily. i'm sure we will have ups and downs because the economy is only gradually recovering. but we, members of the french government, are looking at the marker of a sound, good economic policy. we don't believe growth without job is satisfactory. it's all interlinked. we just recently published a study yesterday, actually, where we studied the effects on employment of the development of green technologies. and it's really interesting to
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see that there is a net creation of jobs as a result of stimulus addressed in the green technologies. we need to go there. green technologies are necessary if we want to respond to the channel of -- >> which makes copenhagen even more disappointing. madam lagarde, thank you so much for joining us. we appreciate your time. we're going to take a short break. still to come here from the world economic forum, we'll be joined by the viewpoint of the european commission and the first secretary of business in the uk, lord mannedelson.
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let's get to our roundup of the global equity markets now. in the ftse 100, we are higher by 0.1% or so. whitbread is the biggest gainer of the market today. that has prompted analyst upgrades. also, the banks aren't doing too badly today, led higher by hsbc. but we are off the hey highs of the session. we will end markedly lower. patricia, how is it going to in germany? >> not too good. i have to say, we are seeing interday session lows.
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for the whole of january, we are down 7.5% so far. of course, we are waiting for the u.s. to open and this despite the earnings season in germany looking very healthy. and also the guidance looking rather more stable than the previous quarter. so at the moment, what is trading up and holing up nicely is henkel. up 2.3%. good numbers, good outlook. here is the reward. analysts are increasing ratings on that stock. linde, bmw, good numbers for 2009 and same message from porsche. underperforming commerzbank and munich re. over to ste pan. >> we had a feeling this morning that the market would bounce back. it's not the case any more. plenty of stocks are gaining, which includes ariva, 5.4% increase in sales and a confident outlook for 2010. the company believes that the order, backlog and the revenue will increase in 2010, but it's not enough and the stock is
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still losing 1.5%. the auto advertising company, jcloca, here again, this stock is trading a bit lower. and one of the few gainers eads under the negotiations the a craft a400m will be resuming next week in germany. adam, let's have a look at the talks in asia this morning. >> thank you very much. we had losses across the board. and the scorecard for the end of the month, the first month to the new year wasn't too good, either. if you take a look at the biggest losers, the shanghai and the hang seng both ending down 2%. the best performer down 3.3% and the kospi down 4.8.
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in japan, the market continued to be under pressure here. it was one of the worst stocks in asia as exporter stocks took a tumble. and toyota continues to be in focus, has lost another 2% in the trading day. that racked up about a 17.6% decline since last week. and, of course, just breaking the wires at 6:00, toyota says that they've idled six plants. i'm not sure which markets it will be in, but it's probably in the u.s. market. so the stock is coming under pressure here as we move into the big earnings s for japan starting next week with honda and followed by toyota. not a great way to end the trading week or the trading month. on that note, it's back to ross in davos. >> still to come on the program, we'll be joined by the vice president, the european
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commission and lord mannedelson, secretary of state in the uk and the first secretary of the state.
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you're watching "worldwide exchange." >> and here in asia, teches and resources stocks weigh approximately. >> in the united states, the economy likely grew at the fastest pace in four years in the fourth quarter, but experts say don't start celebrating just yet. >> good to have you with us on "worldwide exchange" this morning. let's take a look at how the futures are shaping up here four hours ahead of the opening bell. it's really mixed on the morning after the closing bell from the likes of amazon.com and microsoft.
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by uninvestors may be taking a wait and see attitude this morning because in four hours time, we are going to get that number. becky. >> let's check on the european bonss. we have seen gains for many of the markets today. 0.6% good to the dax. the smi is shifting down by 0.4%. christine, how are the asian markets looking? >> this is how the picture is looking ahead of the data from the u.s. eu euro/dollar, 1.3961. dollar/yen, 90.17. sterling/dollar, 17614 and euro/sterling, 0.8648. mike, back to you. >> thanks, christine. we had blowout numbers from
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microsoft and amazon.com. microsoft's numbers jumped 60%, easily beating analyst forecasts. the company has not seen a strong pick up in business spendinging, but expects a recovery sometime this year. microsoft will launch a new version of office in 2010. and in frankfurt trading, microsoft shares are up 0.75%. meantime, president obama will formally announce today one of the job initiatives that he mentioned earlier this week. the president will promote ads 33 billion tax credit for small businesses that hire workers this year. so that is going to be about $5,000 for each job created, up to $500,000 per company. employers can raise wages and be
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reimbursed for social security payroll taxes. senate democrats expect to roll out their new jobs package next week. becky. >> well, the greek prime minister has warned that other countries like greece go through the same thing i say nation is going through. george papandreas is saying today we're talking about greece, but tomorrow it could happen to smnlts. they insisted that there were no risks that greece would default or lose the common currency market. >> here in asia, india's central bank left shortchanged interest rates unchanged, but surprised markets with a bigger than expected 75 basis point hike. despite rising inflation, the reserve bank of india has been pressured to keep its loose monetary policy to support asia's third largest economy. the rbi expects gdp growth to
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hit 7.5%. the indian rupee fell after the decision. right now, looking weak against the dollar. 46.26. as you can see, up just a touch there. becky. >> let's get back to andy here is on set here in london. greece. what's going on there? >> it's fascinating. all these people in the ecb, the french chance lore are going to come out and say, yeah, greece has real problems. we have to defend it. but where greece is different from the likes of spain is in the savings ratio. in spain, they're saving 19% for gdp. in greece, it's really low. to put that into context, if you went in to try and refinance greece and taking more money, they are taking that money and spending it. so they need to save 10% of their gdp to get in line with the other countries. so greece and portugal are going
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to be a really hard act to fix there, going forward. and you get into the point of no return because the costs of trying to keep the consumption going just blows up. so for all the things, it's going to away long, hard time to get out of this situation for greece. and the other countries, cutting that sort of gdp is going to have a dramatic impact on the country and jobs in general. >> andy, it was interesting. i talked to the greece finance minister yesterday and it's pretty clear they're frustrated with the market's reaction. they got it away, but that was quickly frosten. basically, the markets don't believe they'll be able to reduce in that plan without big, political disturbances. i mean, you know, what do you think the markets will do?
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>> yeah, i believe they are. so greece can effectively finance itself from its own sort of people, it's going to have a dramatic impact on sort of gdp. and i think, you know, the markets are going to keep going after greece until they actually believe, you know, that the numbers coming out of greece are intriguing. until they do believe what they're being told, you'll see spreads widening out. then the cost of funding this deficit get higher and higher. and you get to a point of no return. a bit like sterling was in the ecm and they put interest rates up to 15% to try and save it and the market said, sorry, chap is
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going over. >> and george soros made a lot of money out of that, but he thinks greece's problems will be over in six months. so there are differing views on that. andy, stick around. more to come from you. we'll be joined by the eu economic affairs commissioner. ♪ well, look who's here. it's ellen. hey, mayor white. how you doing? great. come on in. would you like to see our new police department? yeah, all right. this way. and here it is. completely networked. so, anything happening, suz? she's all good. oh, my gosh. is that my car? [ whirring ] [ female announcer ] the new community.
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global equity numbers are focusing on u.s. growth numbers today. we also got data out of the euro zone a short while ago. let's get a few of how we compare maybe the euro zone economy and the problems there and the deficit in the united states. joining us is jacob malmuney, soon to be competition commissioner if the vote goes all right in about a month's time. let's look at the unemployment. i guess the vote is ticking up. can we have any meaningful recovery until unemployment goes down? >> unfortunately from the economic point of view, we know that first of all, it's growth. and a few quarters later is employment growing up. at the beginning of the recovery, we have the experience in past times that employment
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starts to grow only when growth of the gdp is confirmed. >> can we get much growth when there's so many countries in the euro zone, greece, portugal, spain, you're having to put in pretty severe austerity measures which the markets believe won't work? >> no. first of all, we are fully committed to help these countries, to implement the programs for fiscal console daegz but at the same time put pressure on them for what they have decided to do. and this is one necessary condition for growth. we have also experiences in the past that fiscal consolidation is helpful for it to sustain the growth recovery. >> how do you make marketmakers and prayers investors below what you just said?
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>> they have to blef in the political determination and for members, the ministers, the european commission to help to cooperate, to give them sole date think that they need and for them to put pressures that we have committed as europeans. >> this is christine here in asia. i understand some sort of agreement or greece is trying to hammer some order of agreement to get china to buy some of its bonds. what role do you see china playing in the recovery in greece? >> i think both the greek authorities, the china authorities, everybody has united. the fact is that crease went to the markets on tud. greek public bond were a success in the markets. they were oversubscribed by five times. and this is one step forward.
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they have presented to the rerow group. we gave recommends to greece last week. they're waiting for greece to accept and fully implement those measures last week. once we will give clear recommendations, we will put pressure and at the same time, the greek authorities will accept these recommendings and will implement in the coming months. >> it's andy from london here. you mentioned the word pressure here a number of times in the answers you've given. but apart from actually controlling the printing presses in greece, what pressure can you really bring to bear if grooks -- because cutting public spending, we haven't done it in the uk for 40 odd years and it's very, very hard to get a ditch sit down without causing huge social unrest.
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what pressures do you bring to bear? >> bef to explain. when a country has problems, these problems where a common concern for all the members of the euro area and all the members of the euro area should development with a country with problems. we cannot get out of this crisis. so we have all in the same gold chance and we are cooperating with those who have the model pieces, about you at the same time. we're trying to go honor those who come in behind us. s&p 500 takes over when "worldwide exchange" has done. we're going back out to becky.
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where are you? >> hello! hello out there, ross. i'm behind the cnbc global village, wrapping things up with our world economic forum coverage. it may be the last day, but we have plenty of fireworks coming your way today. just a little bit ago, we spoke with barney frank, the house financial services chairman. he made some fiery comments. we're going to match that up with tim donahue. we'll be speaking with ar reanna huffington. we have ross perot jr., we have clayton dib aye leer and rice. don't forget, we get fourth quarter gdp numbers. ross, back to you. hello!
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>> thanks very much, becky. you do have to shout, don't you? there we go. >> you can hear me faster if i yell. >> it is easier to do that shouting because of the delay. there's this weird thing, of course, you know, we're sending the sound to the united states and back again. so it's strange, but that's the way it works with the technicals when you're doing shows like this. still to come, we hope to be zoind by lord mandleson. and, of course, we're going to look ahead to the u.s. gdp number.
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welcome back to "worldwide exchange." the economy could be growing at the fastest pace in nearly four years. forecaster are calling for growth of 4.8% versus 2.2% in the third quarter. the chain-weighted price index is expected to rise 1.3%. at 8:30, we get the fourth quarter employment cost index, which is expected to increase
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0.4%. the january chicago pmi is out at 10:00. analysts looking for a reading of 57.2, down 1.5 points from last month. also at 4:00, the general sentiment is released, up 0.5% from december. let's get a look at the trading day ahead on wall street today with jack bouroudjian. good morning, thanks. thanks for being here. >> my pleasure. thank you. >> so what is going to carry the day today? is it going to be the lead reconfirmation of bernanke yesterday, the blowout earnings from amazon.com and microsoft or is it all about gdp, gdp, gdp? >> well, i think it's going to be a little bit about gdp. i think it will be digesting some of the news that we're experienced over this last week. this is a time when we're starting to see a bit of a shift in the tone of the market. if you think about it, for the
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last six months, good news has been good news and bad news has been good news. all of a sudden, we're starting to see a pendulum shift there. we're not seeing the market react quite like it was a few months ago, which tells me there might be a bit of exhaustion there and we're probably in the middle of a construction that is well deserved. so as far as today's action goes, keep in mind, not only do you have great werings, but you also have the end of the month which is going to play into what was today. >> so what kind of number, if any, are you looking for on gdp and is it going to have to big a big miss down to the side and some major upside in order to move the markets today. >> i think if there's any price at all, it will know to the down si side. so in the event that we see a number issued 4.5%, be careful. on the other hand, if we see a market that's blowing away the
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street, over 5 ers, 5.5%, i don't think any rally will have a lot of legs or traction to it only because of what i said earlier. it feels as if now the exhaustion of the market is starting to take place. that and, of course, we've had an amazing run, 6 % off the lows. so it would make sense for the market to start stalling. >> all right. thanks, jack. a lot of people are calling for a correction at this point. jack bouroudjian, ceo. >> let's get a quick thought from andy of schroeder's. andy, we've come to the end of our davos coverage now. we spoke to loads of big guests. what do you make of the position, the role that davos plays? >> i think it's been very low key. over the last few years, people have looked at davos for sort of world leadership and you've had the great and the good out there. this time, it's been low key and i think the 350e78 that go realize that there's not a lot they can do when you get on the wrong side of the financial markets.
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people out there can say, you know, stop being nasty to greece and selling all their bonds. but if they don't get things under control, all the people, it doesn't really work. >> andy, thanks so much for coming and spending time with us. ross and maria, let's head it back to you. >> ross is busy reading a magazine and it's a creation of the fabulous producers, patrick allen and lulu chang. >> there is quite a strange looking chap here, i can tell you. >> look at you. what is that face? >> and there's all these pictures and little cab temperaturing of the davos experience in this magazine. davos diary. congratulations to all of cnbc europe and cnbc for doing such a fantastic job in davos. final thoughts on davos? >> you know, it's been a -- i found the bankers particularly cautious, okay? they've gone into an environment
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that they sort of work -- they're having a tough time. it got particularly tough for them. they're trying to fight back. i think they're going to have to say, look, we're in a particularly tough spot. >> one sector from google told me is that they're advertising spending money, retail. i thought that was interesting. >> it's been a pleasure. that's it. mike, great to have you today. >> thanks. it's good to be here, kind of. but the u.s. futures are perking up a bit. that's it for "worldwide exchange." have a great weekend. >> i'm becky meehan in europe. >> and here in asia, christine tan. thanks for your company on "worldwide exchange."
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